Chipmakers' expansions might create overcapacity

ANALYSTS IN THE FAR EAST are worried that TSMC and UMC might create too many 12-inch wafers.

Both chipmakers have announced that they have increased their capital budgets to maximise their 12-inch wafer fabs' capacities. However analysts have told Digitimes they are worried that the expansion projects might result in overcapacity at Taiwan's 12-inch fabs.

However UMC CEO Shih-Wei Sun said everything should be okay as the risk of producing too many wafers was small. Currently there is a shortage of 12-inch wafer capacity that has seen delayed deliveries of some key equipment because of tight capacity at suppliers.

But it seems the problem could show up in about 2012 when the companies are still making the things and the backlogs will have been cleared. µ